Two American economists have won this year's Nobel Memorial Prize in Economics for their work in designing market institutions that match different parties within the market as efficiently as possible.

The Royal Swedish Academy of Sciences in Stockholm said Monday it has awarded the prize to Alvin Roth, an economics professor at Harvard University, and Lloyd Shapley, a professor at the University of California, Los Angeles (UCLA).

The academy praised the 89-year-old Shapley for developing a process to match different people or organizations within a market in a stable manner that limits their tendency to manipulate each other. It credited the 60-year-old Roth for conducting experiments that show how Shapley's theory can improve the functioning of important markets in practice.

The academy said Roth also used Shapley's research to redesign existing instructions for matching new doctors with hospitals, students with schools, and organ donors with patients. It said the two Americans, who work independently of one another, will share the $1.2 million prize for an “outstanding example of economic engineering.”

The economics prize was not part of the original group of awards established in the will of Swedish industrialist Alfred Nobel. The Swedish central bank created the annual prize in 1968 in Nobel's memory.